| AV Birla group to pay $6bn for US-based Novelis |
| Our Web Bureau/Kaushik Dutta / Mumbai February 11, 2007 |
| Hindalco, an AV Birla group firm, today announced it has signed a definitive agreement to buy US-based aluminium products company Novelis in an all-cash transaction which values Novelis at approximately $6 billion, including approximately $2.4 billion of debt. Under the terms of the agreement, Novelis shareholders will receive $44.93 in cash for each outstanding common share. Kumar Mangalam Birla, chairman, Aditya Birla Group, said: "The acquisition of Novelis is a landmark transaction for Hindalco and our group. It is in line with our long-term strategies of expanding our global presence across our various businesses and is consistent with our vision of taking India to the world. The combination of Hindalco and Novelis will establish a global integrated aluminum producer with low-cost alumina and aluminum production facilities combined with high-end aluminum rolled product capabilities. The complementary expertise of both these companies will create and provide a strong platform for sustainable growth and ongoing success." "We expect the transaction to be completed by Q2CY07." The deal is at 16.5% premium to Novelis shares' (NYSE) closing price of $38.54 on Friday. Novelis is the global leader in aluminum rolling and can recycling. It caters to the automotive and transportation, food and beverage, industrial and construction, foil and printing industries. Novelis incurred a net loss of $102 million for third quarter ended September 30, 2006, or $1.38 per share, on net sales of $2.5 billion, compared with net income of $10 million, or $0.14 per share, on net sales of $2.1 billion for the third quarter of 2005. For the nine months ended September 30, 2006, the US firm incurred a net loss of $170 million, or $2.30 per share, on net sales of $7.4 billion, compared with net income of $32 million, or $0.43 per share, on net sales of $6.3 billion for the same period of 2005. Updated at 1200 hrs: Hindalco Industries has decided to acquire aluminium products company Novelis Inc. The Aditya Birla group company will announce details of the deal later this evening. The Atlanta-based Novelis , which spun-off from Canadian aluminium major Alcan Inc two years ago, had been looking for suitors in the past few months. Industry sources said Hindalco Industries had encashed investments in mutual funds worth Rs 2,200 crore last week as a part of part financing the deal, estimated to be over $5 billion (Rs 22,500 crore) . The company |
